With tablet market share shrinking, much depends on event

Published: Tuesday, Oct. 22, 2013 1:15 a.m. CDT

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(AP)

Developers look over new apps being displayed on iPads at the Apple Worldwide Developers Conference June 10 in San Francisco. Apple is expected to round out its line-up of gadgets for the holiday shopping season with the unveiling of its latest iPads today.

With just 65 shopping days left until Christmas, Apple is about to give Santa Claus more goodies to stuff into those stockings.

At an event today in San Francisco, the Cupertino, Calif.-based tech giant is expected to unveil a fifth-generation iPad as well as a follow-up version of the iPad Mini it released a year ago. While its email invitation cryptically announces, “We still have a lot to cover,” one thing is clear: With its stock price well below its onetime high and its share of the tablet market continuing to shrink, Apple has a lot riding on this launch.

IDC analyst Tom Mainelli thinks an iPad refresh would help Apple as well as the burgeoning pack of rivals chipping away at the iPad’s former dominance.

“A new iPad launch always piques consumer interest in the tablet category, and traditionally that has helped both Apple and its competitors,” he said.

After Apple skipped its traditional iPad upgrade last spring, Mainelli added, “its numbers were down, but almost everyone else’s were down, too. So while Apple’s market share may have dropped, they still drive the overall tablet market, and consumers are still paying close attention to what Apple is doing with its products.”

As with past Apple events, the rumor mill has been working overtime. Most analysts and bloggers expect the new iPad will sport the more powerful 64-bit A7X processor and reveal a slimmer physique than its predecessors. KGI Securities analyst Ming-Chi Kuo says the tablet will be 15 percent thinner than the iPad 4 and feature more rounded edges.

And since Apple has historically offered the same features across different platforms, as evidenced by the personal assistant Siri eventually showing up on both iPhones and iPads, most observers widely believe the second-version iPad Mini will come with the same Retina display that the larger iPad already features.

One big question is whether either of the new devices will feature Touch ID, Apple’s proprietary fingerprint identity sensor featured on the new iPhone 5S unveiled last month. A Chinese blog site leaked photos of a purported fifth-generation iPad with the sensor in place of the traditional home button. And analyst Tim Bajarin with Creative Strategies says improving its tablet’s security makes sense as Apple continues to push its devices into the business world.

“We believe that as an iPad 5 starts showing up in more and more corporate accounts, and as more employees are taking their tablets to work with them, security becomes an ever more important part of the equation,” Bajarin said. “And since Apple owns the Touch ID technology, they could also introduce it on the iPad Mini.”

Apple’s event comes as the tablet computer plays an increasingly significant role both in the lives of consumers and in the way companies conduct business. From iPad-equipped airline pilots and warehouse managers to schoolteachers and their tablet-toting students, the device has become a handy and even crucial tool for the mobile masses.

IDC reports that tablet shipments in the fourth quarter are expected for the first time to surpass total PC shipments, which include desktop and laptop computers. And it forecasts tablets will do the same on an annual basis by the end of 2015.

So even though Apple’s piece of the global tablet pie may be smaller than it was in 2010 when the first iPad went on sale – a drop from 77 then to 37 percent today – IDC’s Mainelli says that doesn’t necessarily mean Apple’s in trouble.

“When the iPad first launched, nobody was really all that competitive in the tablet market, so since then Apple has only had one direction to go, and that’s down” in terms of market share, he said. “Having said that, Apple doesn’t chase market share at the expense of profitability or a good user experience. So while there are a lot of guys out there making Android tablets, not a lot of them are making any money.”

“At the end of the day,” Mainelli said, “the companies left standing are those who put out good products that people want and make money doing it.”